VietNamNet Bridge - The Vietnamese retail market is expected to be re-divided with the presence of Vingroup, a Vietnamese company with powerful financial capability, and other 
firms.


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Analysts some years ago warned that the retail market would be swallowed by foreign brands which have experience and prestige once Vietnam has to open the market to foreign investors under pressure of free trade agreements (FTAs). However, they might have to change their mind about the issue.

The deal of Vingroup taking over Maximark chain in late October has heated up the Vietnamese retail market. 

The deal was wrapped up just after two weeks of negotiations. Analysts guessed that Vingroup might accept to pay good price to acquire the retail chain.

Taking over Maximark is a part of Vingroup’s strategy on quickly expanding its retail network throughout the country. Maximark has four supermarkets in HCM City and one in Tuy Hoa, Nha Trang, Cam Ranh, Phan Rang and Bien Hoa.

The number of supermarkets Maximark has developed over the last 20 years is modest. However, as compensation for this, Maximark supermarkets are all situated on very advantageous positions and cover large areas of over 20,000 square meters on average.

Therefore, analysts believe that Vingroup targets Maximark for its long term development strategy. 

Vingroup, which was an unknown in the retail market, has quickly become a power. Established as a real estate developer, Vingroup has step by step jumped into the retail market after continuously taking over existing supermarket chains.

In October 2014, Ocean Group announced the sale of 70 percent of the retail and property management sector to Vingroup, under which Ocean Marts have changed into Vinmarts.

In early 2015, Vingroup bought 100 percent of stake of Vinatexmart, the distribution chain belonging to the nation’s leading textile and garment group Vinatex. With the deal worth VND229.5 billion, Vingroup now owns 39 Vinatextmarts.

Vu Vinh Phu, chair of the Hanoi Supermarket Association, commented that Vingroup’s steps with dizzy speed shows the big guy’s ambition to become the leader in the retail market.

Saigon Co-op, another big player in the retail market, has also been quietly expanding its network. It now runs 78 Co-op Marts, 90 Co.op Foods, 2 Co.opXtras, Sense City Can Tho, HTV Co.op – a TV shopping channel and contributes capital to SC VivoCity joint venture in district 7, HCM City.

Besides, the other two ‘big sharks’ in the market, Hapro (the Hanoi Trade Corporation) and Satra (the Saigon Trade Corporation) have also been gearing up to scale up their business.

The moves taken by the Vietnamese retail chains show that Vietnamese investors are formidable rivals to foreign famous retailers, and have reassured the public that the retail market will not fall into foreigners’ hands.

SGDT